Manufacturers often maintain a large inventory of supplies and parts in order to meet production requirements at their assembly plants. Inventory may be maintained at the assembly plant as well as at warehouses and other storage facilities. Supplies and parts are stored at these various locations until they are needed at the assembly plant production line. The maintenance of inventory at assembly plants and related facilities can be very costly to a manufacturing organization. The space requirements for simply holding inventory may be significant and therefore, costly. Costs may also be increased if inventory must be moved from one location to another before it is used in a production line. Furthermore, a large amount of inventory reduces flexibility to respond to market demand.
Many manufacturers have attempted to control inventory costs by reducing the amount of inventory they maintain. For example, some manufacturers may wait to place supply orders until shortly before a particular part is needed. Using this approach, a manufacturer may reduce the amount of time that a part or supply is in its inventory. However, the manufacturer is still required to maintain an inventory using this approach. A manufacturer may also ask a supplier to postpone delivery of a particular order until shortly before the supplies are needed. Using this approach, the supplier effectively maintains the inventory on behalf of the manufacturer. Any associated costs are likely to be passed on to the manufacturer so there is no real benefit to the manufacturer to have the supplier postpone delivery.
Some attempts have been made to control inventory through the ordering process. U.S. Pat. No. 5,765,143 to Sheldon, et al. discloses a system and method for controlling inventory of vendors at one level of a part distribution chain. The inventory control system generates order data in response to reference data that is indicative of sales, inventory, demographics, and/or market characteristics of at least two vendors. The order data relates to a recommended inventory increase transaction, inventory reduction transaction, and a recommended stocking level of one or more parts by the vendor.
U.S. Pat. No. 5,974,394 to Bellini, et al. discloses a system for enterprise planning across a supply chain. The system operates bi-directionally so that integrated planning-and scheduling information is exchanged horizontally and vertically across the supply chain. Each organization that participates in the supply chain can view the entire supply chain and assist the enterprise in executing more efficient planning strategies. However, the system does not address problems related to inventory control.
U.S. Pat. No. 5,983,195 to Fierro discloses a system and method for scheduling product orders that results in a dynamic association of customer product orders with physical products on a production line. A product order record and a physical product record list attributes related to the physical features of a manufactured item. The attributes of each record are compared to determine if the product order may be associated with the physical product on the production line. The physical product is then used to fulfill the product order. The dynamic association may occur at different points in the manufacturing process. The system and method do not address problems related to inventory control.
None of the above references relate to the synchronizing of production between a supplier and a manufacturer so that the inventory maintained by a manufacturer is eliminated or reduced significantly.